Judge: Virginia Keeny, Case: 20VECV01432, Date: 2023-03-07 Tentative Ruling


Case Number: 20VECV01432    Hearing Date: March 7, 2023    Dept: W

LEROY SANCHEZ v. MID-CENTURY INSURANCE COMPANY, et al.

 

Defendants ANGELICA MAClAS DEBACA INSURANCE AGENCY, INC. and CARMEN MARIA LOYA-MARROQUIN’s demurrer to the first amended complaint

 

Date of Hearing:        March 7, 2023                                   Trial Date:       None set.  

Department:              W                                                        Case No.:        20VECV01432

 

Moving Party:            Defendants Angelica Macias Debaca Insurance Agency, Inc. and Carmen Maria Loya-Marroquin

Responding Party:     Plaintiff Leroy Sanchez

 

BACKGROUND

 

Plaintiff alleges Defendants denied Plaintiff’s insurance claim in bad faith. Plaintiff contends in 2010, Plaintiff installed a ‘small wind energy system’ on his property. After the wind turbine collapsed in 2019, Plaintiff contacted Defendants to present his claim. Plaintiff alleges Defendants’ claim representative, Ms. Anderson, advised Plaintiff over the telephone that the claim was approved and that he would be receiving the maximum amount covered for “Separate Structures”, which was approximately $50,500.00. However, Plaintiff alleges Ms. Anderson later sent Plaintiff a follow-up letter stating that the loss would not be covered, even though, previously, on numerous occasions, Defendants represented and assured Plaintiff that the loss would be covered. Plaintiff claims Anderson attempted to argue that “wind chargers” and “windmills” were not covered for windstorm damage.

 

On November 29, 2022, Plaintiff filed a First Amended Complaint against Defendants Mid-Century Insurance Company and Farmers Insurance Company, Inc. asserting causes of action for (1) Breach of Contractual Duty to Pay a Covered Claim; (2) Breach of Implied Obligation of Good Faith and Fair Dealing; (3) Breach of Fiduciary Duty; (4) Invasion of Privacy; and (5) Negligence. Plaintiffs named Angelica Macias Debaca Insurance Agency, Inc. as Defendant Doe 1 and Carmen Maria Loya-Marroquin as Defendant Doe 2.

 

[Tentative] Ruling

 

Defendants’ Demurrer to the First Amended Complaint is SUSTAINED WITH LEAVE TO AMEND; Defendants’ Motion to Strike is DENIED.

 

ANALYSIS

 

Defendants Angelica Macias Debaca Insurance Agency, Inc. and Carmen Maria Loya-Marroquin demur to the First Amended Complaint on the grounds the Complaint fails to state facts sufficient to constitute the cause of action therein and is uncertain.

 

Uncertainty

 

Defendants first demur to the complaint on the grounds the complaint is largely vague and uncertain with respect to the Agent Defendants. The court agrees. While Plaintiff contends Defendants are aware of what claims are against them as they have already received evidence in this lawsuit, the court finds the allegations do not sufficiently distinguish the actions by the insurers and/or their agents.

 

Accordingly, Defendants’ demurrer for uncertainty is SUSTAINED WITH LEAVE TO AMEND.

 

First and Second Cause of Action

 

Defendants demur to the first (breach of contractual duty to pay a covered claim) and second (breach of implied obligation of good faith and fair dealing) causes of action on the grounds there are insufficient facts alleged.

 

Defendants argue under California law, an insurance agent cannot be held liable for breach of contract or breach of the implied covenant of good faith and fair dealing because the agent is not a party to the insurance contract. The court agrees and Plaintiff does not address this contention. As noted by Defendants, “non-insurer defendants [are] not parties to the agreements for insurance; therefore, they are not, as such, subject to an implied duty of good faith and fair dealing.” (Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, 576.)

 

Accordingly, Defendants’ demurrer to the first and second causes of action is SUSTAINED WITH LEAVE TO AMEND.

 

Third Cause of Action

 

Defendants demur to the third cause of action for breach of fiduciary duty on the grounds of uncertainty and failure to state facts sufficient to support a cause of action.

 

The elements for a breach of fiduciary duty cause of action are “the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach.” (Thomson v. Canyon (2011) 198 Cal.App.4th 594, 604.) “‘[B]efore a person can be charged with a fiduciary obligation, he must either knowingly undertake to act on behalf and for the benefit of another, or must enter into a relationship which imposes that undertaking as a matter of law.’” (Hasso v. Hapke (2014) 227 Cal.App.4th 107, 140 (quoting Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 221).) “A fiduciary duty under common law may arise ‘when one person enters into a confidential relationship with another.’” (Id.) 

 

Defendants argue rather than even attempt to articulate a duty specific to the Agent Defendants, Plaintiff instead only generally and generically alleges that all “Defendants … breached their promise to cover Plaintiffs loss” and that “Defendants’ denial of Plaintiffs coverage was manifestly unreasonable[] and done in bad faith.” As noted above, the allegations do not sufficiently distinguish the actions by the insurers and/or their agents.

 

Defendants further argue the Agent Defendants owed no duty to Plaintiff other than to obtain the insurance requested in a reasonable manner and there are no allegations that the Agent Defendants failed to do so. Plaintiffs allege “[i]nstead of fulfilling their duty to Plaintiff, Defendants breached their promise to cover Plaintiff’s loss, and, in contradiction to their previous promises, wrongfully denied Plaintiff his coverage.” (FAC ¶82.) The court agrees.

 

In opposition, Plaintiff cites to Paper Savers, Inc. v. Nacsa (1996) 51 Cal.App.4th 1090 to support his contention Defendants owed a duty to Plaintiff. Plaintiff contends the duty was clearly breached first by continuous misrepresentation that Plaintiff was covered and then by Defendant Marroquin’s (who was at the time an employee of Defendant Angelica) advising the claims adjustor that Plaintiff’s claims should not have been covered, even though previously she assured Plaintiff otherwise. However, the complaint does not allege Defendants Angelica Macias Debaca Insurance Agency, Inc. or Carmen Maria Loya-Marroquin misrepresented Plaintiff’s claims were covered. The complaint refers to Ms. Anderson as the agent who misrepresented that the claim would be approved. (FAC ¶40.) Moreover, Paper Savers was based in tort for negligent breach of duty – not fiduciary duty and “a breach of fiduciary duty is a species of tort distinct from a cause of action for professional negligence.” (Stanley v. Richmond (1995) 35 Cal.App.4th 1070, 1086.) As such, Plaintiffs have failed to allege Defendants’ assumed an additional duty and that that duty amounted to fiduciary duty rather than mere negligence.

 

Accordingly, Defendants’ demurrer to the third cause of action is SUSTAINED WITH LEAVE TO AMEND.

 

Fifth Cause of Action

 

Defendants demur to the fifth cause of action for negligence on the grounds Plaintiff fails to allege sufficient facts.

 

To plead a cause of action for negligence, one must allege (1) a legal duty owed to plaintiffs to use due care; (2) breach of duty; (3) causation; and (4) damage to plaintiff. (County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal. App. 4th 292, 318.) “In order to state a cause of action for negligence, the complaint must allege facts sufficient to show a legal duty on the part of the defendant to use due care, a breach of such legal duty, and the breach as the proximate or legal cause of the resulting injury.” (Bellah v. Greenson (1978) 81 Cal.App.3d 614, 619.)  In California, negligence may be pleaded in general terms. (Landeros v. Flood (1976) 17 Cal.3d 399, 407-408.) 

 

Defendants argue Plaintiff fails to allege that there was any relevant duty owed by Defendant Loya-Marroquin to Plaintiff and further fails to allege that Defendant Loya-Marroquin’s purported challenge of the coverage decision breached such a duty.

 

In opposition, Plaintiff argues Defendant Marroquin affirmatively assumed a duty of care towards Plaintiff, when she represented to him, that she will consult with an agent who has special knowledge in the insurance field before taking Plaintiff’ claim, because she does not want his claim to be denied. However, this is not alleged the complaint. When analyzing demurrer, the Court is limited to the four corners of the Complaint and those facts subject to judicial notice.  (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.)

 

As pled, Plaintiff has not sufficiently alleged Defendant Carmen Maria Loya-Marroquin breached a duty by holding out or misrepresenting the insurance policy.

 

Accordingly, Defendants’ demurrer to the fifth cause of action is SUSATINED WITH LEAVE TO AMEND.

 

Motion to Strike   

 

Defendants move to strike ¶¶ 57, 78-79, 84, and 92 inasmuch as they seek attorneys’ fees and punitive damages from the Agent Defendants; and Plaintiff’s Prayer for Relief, Request No. 1 and 6.

 

Attorney Fees

 

Defendants move to strike Plaintiff’s claim for attorney fees on the ground neither the Complaint nor Request No. 1 allege any facts that would explain why Plaintiff is entitled to attorneys’ fees as there is no allegation of a contractual agreement to attorneys’ fees nor is there any allegation that such fees are available by statute.

 

In opposition, Plaintiff argues he is clearly entitled to attorneys’ fees if he prevails on the Fourth Cause of Action – Invasion of Privacy because Code of Civil Procedure section 1021.5 provides explicit statutory authorization for a private attorney general attorney fee award without regard to whether the public policy vindicated rests on the constitution or statute.

 

The court finds Plaintiff has not sufficiently alleged grounds for attorney fees.  “[S]ection 1021.5 does not authorize an award of attorney fees against an individual who has done nothing to adversely affect the rights of the public or a substantial class of people other than raise an issue in the course of private litigation that could establish legal precedent adverse to a portion of the public.” (Adoption of Joshua S. (2008) 42 Cal.4th 945, 949.) Here, Plaintiff’s allegations do not include conduct that in some way has adversely affected the public interest.

 

Accordingly, Defendants’ motion to strike Plaintiff’s claim for attorney fees is GRANTED WITHOUT LEAVE TO AMEND.

 

Punitive Damages

 

Defendants move to strike Plaintiff’s claims for punitive damages on the grounds Plaintiff has failed to allege Defendants acted with malice, fraud, or oppression. Defendants also move to strike on the basis that punitive damages are not available for an alleged statutory violation where the statute specifically provides for a penalty.

 

A motion to strike punitive damages is properly granted where a plaintiff does not state a prima facie claim for punitive damages, including allegations that defendant is guilty of oppression, fraud or malice.  (Turman v. Turning Point of Cent. California, Inc. (2010) 191 Cal.App.4th 53, 63.)  “Mere negligence, even gross negligence, is not sufficient to justify such an award” for punitive damages.  (Kendall Yacht Corp. v. United California Bank (1975) 50 Cal.App.3d 949, 958.)  The allegations supporting a request for punitive damages must be alleged with specificity; conclusory allegations without sufficient facts are not enough.  (Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041-1042.) 

 

Plaintiff argues Defendants’ reassurances that Plaintiff’s claim was covered up until the day the check was to be issue and then suddenly retracted their representation and Defendants’ recording of Plaintiff’s phone calls without informing him is clear evidence of malice, oppression and fraud.

 

For the purposes of a motion to strike, the court finds Plaintiffs have sufficiently alleged a claim for punitive damages. Malice and oppression both include a finding of despicable conduct.  “Despicable” means conduct that is “so vile, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people.”  (Scott v. Phoenix Schools, Inc. (2009) 175 Cal.App.4th 702, 715.)  “Such conduct has been described as having the character of outrage frequently associated with [a] crime.”  (Id.)  Recordings of conversations without consent can amount to despicable conduct.

 

Moreover, as noted by Plaintiff, “although an award of both statutory penalties and punitive damages may be a prohibited double recovery if based on the same conduct, it is not improper to proceed on both theories of recovery and then make an election of remedies either at trial or after trial. [Citations.]” (De Anza Santa Cruz Mobile Estates Homeowners Assn. v. De Anza Santa Cruz Mobile Estates (2001) 94 Cal.App.4th 890, 907.)

 

Accordingly, Defendant’s motion to strike punitive damages is DENIED.